Entrepreneurial School Dropouts: A Model on Signalling, Education and Entrepreneurship
AbstractI present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population.
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Bibliographic InfoPaper provided by Oslo University, Department of Economics in its series Memorandum with number 10/2012.
Length: 38 pages
Date of creation: 02 Apr 2012
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Entrepreneurship; self-employment; education; ability;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-CTA-2012-05-15 (Contract Theory & Applications)
- NEP-EDU-2012-05-15 (Education)
- NEP-ENT-2012-05-15 (Entrepreneurship)
- NEP-LAB-2012-05-15 (Labour Economics)
- NEP-LMA-2012-05-15 (Labor Markets - Supply, Demand, & Wages)
- NEP-URE-2012-05-15 (Urban & Real Estate Economics)
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